Warren Buffett’s recent cash hoarding and significant equity sales have raised questions about his intentions in the current market selloff. An analyst says the “Oracle of Omaha” appears to have been preparing for it. According to Armando Gonzalez, founder of Bigdata.com, Buffett’s actions over the past year are a textbook example of positioning for turbulence.
Berkshire Hathaway sold $134 billion in equities last year, ending with a cash pile of nearly double its size compared to 2023 and significantly higher than its stock portfolio. This trend suggests that Buffett anticipated a period of subpar market performance.
Gonzalez noted that Buffett has been cautious about inflationary concerns and geopolitical uncertainty, warning of rising prices due to President Donald Trump’s tariffs. Historically, when Buffett turns net seller, he often anticipates a decline in the market.
Despite moderate stock buys by Berkshire, Buffett historically looks for bargains in undervalued companies. During the 2008 financial crisis, he invested $3 billion in General Electric when its stock price plummeted.
Buffett’s latest letter to shareholders reiterated his view that valuations are high. However, Gonzalez expects him to wait for true bargains and not chase short-term rebounds.
If Buffett chooses to make a big purchase, he is likely to do so with caution, using a scalpel rather than making a broad-market splash. His patience is seen as a virtue and even a weapon in his investment approach.
Berkshire Hathaway’s insurance business could also be an area of interest for the company. Valuations are still not dirt cheap, but Buffett has shown interest in Japanese trading companies, which may indicate a growing appetite for international diversification.
Rumors of a rare Berkshire sale have emerged, with Compass reportedly in talks to acquire HomeServices of America, one of Berkshire’s key businesses. However, the company has not commented on this report.
Source: https://fortune.com/2025/03/15/warren-buffett-berkshire-hathaway-stock-market-correction-cash-pile-acquisitions